Digital citizens are at the heart of the neo-banking model
The crucial skills that will help create the bank of the future are those focused on creating digital, customer-centric core banking offerings.
This was the word of Bongiwe Kunene, MD of the South African Banking Association, a keynote presentation last week, at the “Future of the Banking Sector” webinar hosted by CNBC Africa in partnership with Euro Exim Bank and smart liquid technologies.
Unpacking the key trends driving change in the banking sector on the African continent, Kunene noted that in the digital age, it is important for banks to have a way to manage digital citizens. She added that they should adapt quickly and incorporate new skills to create shared value for customers, stakeholders and businesses.
“The bank of the future will evolve to become customer-centric and deliver the same experiences that it has come to expect from any market. The skills of the future of the banking sector will focus on basic banking services – what banks do best to enable allocation efficiency in terms of various services, including advisory services, credit services and working with customers to take them to trips and markets they’ve never been to before.
“Today, banks have had to learn to be very agile and they need the same skills that innovative companies are looking for, to deal with data issues, such as data science and data management” Kunene explained.
Supported by a platform-based model, the marketplace banking model is defined as an “ecosystem” of aggregated products and services presented to customers as a wide range of offerings from third-party service providers who have partnered with banks.
Kunene noted that in today’s digital world, transactions will need to be done at exponentially fast speeds. This means there must be real-time settlements and instant payments, as well as innovations that will ensure that digital citizens receive the services they want, instantly and where they want them.
“The skills of the future for the banking sector will focus on creating shared value for customers, businesses and stakeholders, to ensure that they are able to derive new value for themselves from their relationship with the bank. In this regard, banks are researching the critical thinking cost scale: How do you use your data to formulate analytics to create and share positive value for everyone? Banks must also meet expectations of what the world of work would mean, both for customers and their own employees. “
She highlighted the four key trends that will shape the future of banking, as observed by the Banking Association South Africa: mobile banking, digital-only banking, open banking and fintech, and cyber risk and financial crime.
With the rise of mobile use in Africa in a context of limited technological access, online banking channels appear to be the preferred form of engagement. Banks are now pushing for a mobile-focused strategy, either in the form of exclusively mobile banking brands or enhanced mobile apps with features like virtual assistants.
Digital only bank
Accelerating the digital economy first means that the new normal in banking is engagement through a digital interface – or neo-banks. We are moving from cumbersome interactions at branch offices and product-centric organizations to more transparent digital experiences for consumers. Traditional banks are exploring technological solutions to follow the neo-banking model.
Open banking and fintech collaborations
Banks are forced to rethink the customer journey in a digital world. This has seen fintech providers emerge as potential rivals to the growing adoption of open banking. Open banking requires banks to make their own application programming interface more accessible so that third parties can create new products and services in addition to data. This has seen banks collaborate with fintech companies to achieve this goal.
VSyber risk and financial crime
With the digitization of banking comes the risks associated with cybercrime. Regulators are now stepping up compliance to deal with the rise of more complex and sophisticated financial crimes. Banks need to adopt advanced technologies like analytics and artificial intelligence to deal with this threat.